Hinton Geothermal

On February 6, 2018, Western Economic Diversification Canada, The Government of Alberta, and Alberta Innovates together made a monumental announcement, described by Minister of Innovation, Science and Economic Development Navdeep Baines as “ground-breaking”; a cross governmental partnership representing an investment of 1.2 million dollars to determine the viability of a Geothermal District Energy System in Hinton.

"Today, the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development and Minister responsible for Western Economic Diversification Canada (WD), announced $400,000 for an engineering and design initiative to determine the viability of a Geothermal District Energy System in the Town of Hinton. The Government of Alberta and Alberta Innovates will provide a total of $800,000, bringing the investment amount for the Town of Hinton’s project to $1.2 million. The proposed system would produce renewable geothermal heat from marginally producing oil and gas wells to heat the town’s public buildings.”

The Feed Study is underway as of Quarter 1 2018. Results from the FEED study will help Hinton understand what infrastructure could be connected to the geothermal district heating system, should it proceed to development. Such buildings may include schools, government buildings, the hospital, community centres and the seniors centre. It is expected to be completed in Quarter 3 2018.

Hinton, Alberta and surrounding area has long been home to oil and gas exploration and activity that have provided employment to our citizens, and economic growth to our community. As well, this work has provided a sense of what lies beneath: The Town of Hinton commissioned a study in partnership with the University of Alberta and Alberta Innovates that sought to determine the volume of energy available through geothermal energy.

There are 4000+ wells drilled below 2,500m within a 70km radius of the Town of Hinton, many which have bottom-hole temperatures higher than 140 degrees Celsius. Through research to-date and general understanding of the region, Hinton is located in the epicentre of geothermal potential from hot water aquifers in the Western Canadian Sedimentary Basin.

Hinton is a community of 10,000 centrally located to numerous parks, lakes, trails and stunning recreation spots. Hinton is the regional centre to neighbouring communities with services, amenities, education and healthcare to meet the needs of those living in the West Yellowhead corridor. Hinton’s economy includes coal mining, oil and gas, tourism, a pulp and saw mill, as well as forestry research and training. Jasper National Park is 15 minutes to the west of Hinton, and Edmonton is approximately 3 hours to the East.

Epoch Energy Development Inc. is an environmentally responsible energy company established to unlock heat energy in Alberta and Canada. Epoch commercializes geothermal resources in partnership with municipalities, First Nations, resource companies, utilities and food growers.

We produce thermal energy from repurposed well-bores and geothermal development and we recover energy from resource production operations.

We supply thermal energy to district energy systems for homes and buildings, power generation and food production.

Proudly, we are a private Alberta company.

Epoch is a force for change, delivering environmentally friendly and efficient heat and power for sustainable communities and economic growth. Albertans and Canadians returning to work, locally grown organic food and industry diversification will come within our creation of an epoch of renewable earth energy.

“This is a local economy story in which Hinton gets to play a role in defining the way it consumes energy and lead the way to a green, clean future for Alberta. But even better, we are putting locals back to work with a rethink of existing energy infrastructure – repurposing well bores to find latent heat energy, to offset the burden of abandoning wells while creating a creating a green energy source. And, we are doing it standing with the Hinton townspeople and government and industry in a time when the world is watching,” stated Lisa Mueller, President and CAO of Epoch Energy.

On October 12 2016, Hinton Town Council directed Administration to provide $225,000 from the Automated Traffic Enforcement reserve to fund the Pre-FEED study to determine the feasibility of the Hinton Geothermal District Energy Project.

The feasibility study will provide Hinton Town Council with important information and analysis including
options, risks and opportunities with financial implications of the Hinton Geothermal District Energy Project.
It will be a key resource in support of grant funding applications from the Provincial and Federal Governments.

Hinton Geothermal District Energy (HGDE) Pre-FEED Study Details
The Study will cover the characteristics of the geothermal resource, candidate gas wells to be repurposed, likely Project development activities, budgetary costs, timelines and other pertinent project matters. The Study will discuss heat potential based on a review of published and proprietary information in accordance with the Canadian Geothermal Resource Code. Resource production, distribution system and customer service capital requirements will be assessed with Class 5 budgetary cost estimates. A Phase One project economic analysis will be provided with levelized cost and scenario sensitivities. The Study will identify options, risks and opportunities with financial implications.

Study Overview:Upstream Project - Geothermal Resource Production The Study will address resource prospectivity, provide a Class 5 estimate of the costs of resource production facilities, estimated operating costs and identify risks and opportunities relative to both capital and operating costs. The Study will address regulatory requirements and suggest a Project upstream development schedule.

Midstream Project - District Energy System
The Study will make a Class 5 cost estimate of the distribution facilities, estimated operating costs and identify risks and opportunities relative to both capital and operating costs. The Study will address regulatory requirements and suggest a midstream project development schedule.

Downstream Project - Customer Energy Services The Study will make a Class 5 cost estimate of the interconnection facilities and HVAC replacement equipment recommended to receive service from the distribution system, estimate operating costs and identify risks and opportunities relative to both capital and operating costs. The Study will tier prospective customers based on a hierarchy of heating systems, estimated conversion costs, operating savings, thermal load and load profile, each after correlating potential efficiency retrofit improvements. The Study will provide energy efficiency audits of each of the nine proposed customer buildings to suggest potential energy savings options. The Study will address regulatory requirements and suggest a downstream customer interconnection project development schedule.

Project Financial Assessment
The Study will provide a pretax unlevered financial analysis of the Project with simple payback, rate of return and levelized cost of service outputs.

Study Deliverables:
The Study will analyze and summarize the characteristics of the resource to be produced, the oil and gas wells to be repurposed or new for-purpose geothermal production and/or injection wells to be drilled, the preferred means to contract these activities, process, budgetary costs, timelines and other pertinent project matters. The preliminary assessment of heat potential will be in accordance with the Canadian Geothermal Resource Code. The distribution system and stakeholder service matters will be defined and assessed with timelines and Class 5 budgetary costs. An economic model for the entirety of a first phase geothermal district energy project will be provided with levelized cost and scenario analysis.

Project Timeline/Completion: It is difficult to predict the beginning in time and duration of time required to complete each of the multiple Study tasks within the several subproject (upstream, midstream, downstream) swim lanes. The significant unknowns are relative to technical matters and the engagement of necessary project stakeholders. As a matter of example, the time required for engagement with oil and gas field operators cannot be perfectly predicted. Geothermal repurposing technical matters and the number of wells to be evaluated remain to be determined. Further, the companion regulatory engagement is an open ended process. It is expected that the Study work will take approximately 90 days to complete (assuming reasonable stakeholder engagement) and up to 30 days to document. Epoch is prepared to begin work in October 2016 with an anticipated 1Q17 delivery of the draft Study report.

History

On the 23 of June 2015, then Mayor Rob Mackin and Hinton Town Council 2013-2017 heard a presentation during their standing committee meeting. In the space of an hour, Dr. Jonathan Banks of the University of Alberta introduced geothermal, and went on to describe why he believed Hinton had the potential to turn heat, emanating from deep beneath the earth’s surface, into something no one else had done before in this country.

In August of that year, a letter of intent was signed, representing a $25,000 contribution into the evaluation of this potential. Hinton was not alone in this initial investment, with other regional bodies like the County of Grande Prairie and MD of Greenview also committed to investigate the potential of this developing opportunity. And the data that came back looked promising.

In 2016, pre-feed studies began being carried out locally, following the Council of the day committing $225,000 from automated traffic reserves to fund the study. These studies gave positive indication that Hinton had an opportunity in this region to do something amazing.

While the election of 2017 saw extensive public engagement on the subject from the Council, the Council Candidates, and the since elected Council, administration and partners were hard at work. Town staff were seeking opportunities to use grants and partnerships to secure the funding for the FEED study of the project.

Previous Update

On February 7, 2017, Representatives from Epoch Energy presented an update to Hinton Town Council on the progress and plans for the Geothermal Study.

The Town of Hinton has announced a partnership with Epoch Energy to advance Hinton Geothermal; an innovative district energy heating system leveraging heat energy from deep, hot reservoirs in the Hinton area as well as a future goal of geothermal power generation. Hinton’s location is central to oil and gas exploration, well bore infrastructure, and the requisite geology to be repurposed for geothermal energy—an approach that is creative and novel in its vision.

“The opportunity to partner with Alberta-based Epoch Energy ensures the right people are at the table to quickly advance this project,” stated Mayor Rob Mackin.

Epoch Energy Development brings together the expertise needed to develop a community district heating system that will serve institutional and commercial buildings across Hinton with the potential to also provide new baseload renewable energy for the region. As well, Epoch will work with local energy producers to create a complete energy story, where local carbon intensity of existing infrastructure can be reduced by including clean energy sources.

Hinton Geothermal will create a competitive advantage for Hinton by providing an affordable and renewable heat source for the community, attracting new investment and diversification, reducing our carbon footprint and supporting regional exploration/production companies through utilizing this ‘new’ energy potential from existing wells.

Moving forward, a feasibility project will be completed to finalize the scope of the district heating facilities, develop a detailed capital and operating cost model, and confirm the economic viability of Hinton Geothermal through a comprehensive financial model.

Hinton Town Council has entered into a Letter of Intent with Epoch Energy and will be advancing efforts to complete the feasibility study for this project. Pre-feasibility work is already underway and meetings with key stakeholders and partners are taking place. Phase one of the pilot project includes heating many Town-owned buildings, the Hinton Training Centre, and a local high school. Future phases will explore expanded commercial, institutional and possible residential use of geothermal heat. Partners in Hinton Geothermal feel there is an opportunity for Hinton to experience further growth due to the availability of long-term predictable fixed rate heat to customers.